AD #3606 – Cybertruck Goes into Production; F-150 Lightning Prices Slashed; UAW Not the Only Ones Who Sacrificed

This is Autoline Daily, the show dedicated to enthusiasts of the global automotive industry.

TESLA CYBERTRUCK FINALLY GOES INTO PRODUCTION
Tesla is a company known to overpromise and under deliver. But in the end, it does deliver. And finally, after several years of delay, the first production Cybertruck ran down the assembly line at the company’s assembly plant in Austin, Texas. Deliveries to customers will start sometime this fall. Even so, Elon Musk says don’t get too excited just yet. The truck won’t hit full line speed until sometime next year. That’s when we’ll start to get a sense for the true market demand for the truck. Tesla claims to have 1.2 million orders for it.

FORD SLASHES F-150 LIGHTNING PRICES
And right on cue with the start of production for the Cybertruck, this morning Ford announced it’s slashing the price of the F-150 Lightning. And not by a little. Depending on the model, prices get slashed by anywhere from $6,000 to $10,000. The Pro version for commercial customers is now just under $50,000, $49,995 to be exact, which was the price when the truck was originally launched. Ford says it can cut prices thanks to improving costs for raw materials to make batteries as well as higher manufacturing scale. The plant that makes the trucks in Dearborn, Michigan is actually closed right now as it goes through upgrades to triple production to 150,000 electric trucks a year. Ford is also offering a $1,000 bonus if customers order one by the end of this month, as well as 1.9% interest rates on loans. So what do you think? It is just a coincidence that Ford announced the price cut as soon as we learned that Tesla’s Cybertruck is going into production? Nah, I didn’t think so either.

VINFAST INVESTORS HEAD FOR THE EXITS
It was the best of times, it was the worst of times. That’s what Charles Dickens wrote as the beginning of his novel A Tale of Two Cities. But we’re changing that to A Tale of Two Startups: VinFast and Nikola. This is turning out to be one of the worst of times for VinFast. The Vietnamese startup looked like it was ramping up at rocket speed until it hit a bunch of speed bumps. Its electric cars have been universally panned by the automotive media for bad ride and poor quality. Now, Reuters reports that the 80% of the investors who put money into the SPAC that the company was going to use to get publicly listed, have cashed out. VinFast also announced it’s delaying construction of a new assembly plant in the state of Georgia in the US, and we wonder if that plant is even going to get built.

NIKOLA STOCK JUMPS ON CUSTOMER ORDER
Meanwhile it’s a different tale at Nikola. Maybe it’s not exactly the best of times, but the company’s stock shot up 61% on Friday after it announced that a company called BayoTech would buy 50 of its fuel cell trucks and sell it low-carbon hydrogen. BayoTech makes hydrogen and hydrogen storage equipment. But it wasn’t just this announcement that drove up Nikola’s stock price. Reuters reports that investors who were shorting the stock rushed for the exits at the same time that retail investors were rushing in. And that trading frenzy resulted in the highest volume the stock has ever seen. Over 317 million shares traded hands. Even so, at on two dollars and twenty five cents the stock is still something of a bargain.

FORD HAS MOST RECALLS OF ALL
Ford once again had the most recalls of any automaker in the first half of the year in the U.S. In the first half of the year, it issued 31 recalls affecting 4.1 million vehicles according to data from NHTSA. But that’s a 38% improvement over last year when it issued 44 recalls, affecting 6.7 million vehicles. Stellantis issued the second most recalls with 26 affecting 1.7 million vehicles. Ford’s quality and recall problems are the greatest opportunity the company has to improve its profitability. It would literally drop several billion dollars to the bottom line if it could just get to the industry average. Two years ago Ford hired quality expert Josh Haliburton and it looks like he’s having a positive impact. So what’s the root cause of Ford’s problems? We think there are a variety of issues, but a big one is that Dearborn has been fixated on buying the cheapest parts it can find. For example, it had to recall 1.3 million Fusions and Lincoln MKZs because the front brake hoses could rupture. That is completely unacceptable for a company that’s been building cars for well over a century.

MITSUBISHI DROPS OUT OF CHINA
Well, it looks like the end of the road for Mitsubishi in China. It announced it’s suspending its operations there because sales collapsed. Mitsu hit a sales peak of 144,000 vehicles in 2018 but last year that tumbled to just over 33,000. One big problem: Mitsubishi does not sell one pure EV in a country that’s gone EV crazy. The automaker and its joint venture partner GAC stopped producing vehicles back in March because of poor sales of the Outlander PHEV. And they’ve only built about 3,400 vehicles this year. But Mitsubishi isn’t alone. Japanese brands are struggling in China. Last year, their market share was 21.5% but that dropped to under 18% last month. Mitsubishi’s CEO says the Chinese market is entering a phase where “only the strongest will survive.” Which is another way of saying, we’re not the strongest.

BYD SALES AND PROFITS SOARING
And just to show you how strong the Chinese are coming on, in the first half of the year, BYD sold more than 1.2 million vehicles, up nearly 100% compared to a year ago. Thanks to that strong growth, the automaker is forecasting its first half net profit could shoot up anywhere from 192% to 225%. It expects to park $1.64 billion on the bottom line, which is triple what it was a year ago. That’s going to help it fund its global expansion. Today it announced it’s expanding into Morocco with three of its electric cars, the Han, Tang and Atto 3.

CADILLAC OPTIQ EV IS ONLY FOR CHINA
Cadillac is coming out with a new EV called the Optiq. But it’s only available in China. It looks a lot like the Celstiq, but it’s smaller and will be priced under the Celstiq. It will only be offered with one electric motor, but customers get a choice of 150 kW or 180 kW of output, or roughly 200 or 240 horsepower. And top speed is limited to about 112 miles an hour. Car News China reports the batteries will come from the SAIC-CATL joint venture but we don’t have much more details than that. We’ll know more when it is officially launched sometime this fall.

UAW WORKERS NOT THE ONLY ONES WHO MADE SACRIFICES
And for our final news story today, we’re back to the ‘States. The rhetoric coming out of the UAW is really heating up now that it’s into contract negotiations with GM, Ford and Stellantis. The UAW’s new president Shawn Fain complains about how many sacrifices his members had to make during the Great Recession when GM and what was then Chrysler went bankrupt. And he’s right, his members did make sacrifices. But they also got off the easiest of all the stakeholders who were involved. Remember, GM and Chrysler shareholders were wiped out. Bond holders got pennies on the dollar. White collar workers at the company lost a lot more than the blue-collar ones. And thousands of dealers had their businesses taken away from them. That’s not to minimize the sacrifices UAW workers had to make. But everyone else involved lost a whole lot more.

And that brings us to the end of today’s report. Thanks for making Autoline Daily a part of your day.